Tarun Bajaj, the Union Revenue Secretary, stated on Friday that as revenues start to grow, the country’s fiscal imbalance will decrease. Bajaj claimed the government has chosen a liberal fiscal policy in response to increased capital investment at a webinar hosted by the Bengal Chamber of Commerce and Industry (BCCI).
“At 6.9% of GDP, the budget deficit is currently unsustainable. A 4.5 percent growth rate is the aim for 2025-2026. The fiscal deficit might be reduced by 0.1 or 0.2 percent if revenue growth continues. . “, he explained.
The targeted fiscal deficit for next year is 6.4 percent, according to Bajaj, who added that the government had the chance to reduce it even more. ” However, a 35 percent increase in capital investment forced us to maintain the fiscal level at that level,” he continued.
The Revenue Secretary stated that the Centre had begun giving money to states for capital expenditures beginning last year. The last mile infrastructure will not be built unless this is done, according to Bajaj.
” The purpose of the government is to keep the economy booming. Then and only then will income and revenue increase. “, he declared.
In terms of taxation, he said the focus was on maintaining stability, therefore there was little tweaking.
On the subject of direct taxes, he stated that transactions based on TDS accounted for 55% of total revenue.
Greater capital expenditure, according to Bajaj, will lead to increased consumption and spending.
When the government runs a deficit, its debt rises; when it runs a surplus, it reduces. One popular viewpoint on the government’s debt is that it will burden future generations of citizens. This statement is partly true, but it’s also a little deceptive. It implies a comparison between the government’s debt and a private citizen’s debt. Certainly, if you personally amassed a large debt, it would be detrimental to your financial situation.
The fiscal balance of a country is determined by the government’s revenue versus its expenditure in a given fiscal year. The difference between the two is the fiscal deficit, which occurs when the government’s expenditures exceed its revenue in a given year. The fiscal deficit is measured in both absolute terms and as a proportion of the country’s GDP .
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